More than 70% of Polish companies surveyed by the Polish Economic Institute (PIE) say they have experience in the energy industry that can be used in a nuclear project. One-third of the companies report having worked on other nuclear projects abroad. As the biggest barrier, they point to difficulties in raising funds for preparatory activities to enable the procurement of contracts for Poland’s first nuclear power plant. Polskie Elektrownie Jądrowe (PEJ) and Bank Gospodarstwa Krajowego (BGK) are the partners of the PIE report “Ile Polski w atomie? Local content programu energetyki jądrowej” (Eng. Polish share in nuclear projects. Local content of the nuclear power program).
The construction of Poland’s first nuclear power plant is one of the most important infrastructure investment projects in Polish history after 1989. Our investment project will not only secure the supply of stable and clean electricity, but it also will have a huge impact on the development of the region and the national economy, so the greatest possible participation of Polish companies in the execution of this investment project is crucial for us. This will enable domestic companies to develop their competencies, increase their competitiveness and join global supply chains for the nuclear sector.
Michał Kopertowski, director of the Procurement Division at Polskie Elektrownie Jądrowe.
The Polish Economic Institute surveyed more than 100 Polish companies, and more than 30% of them were companies from the Pomorskie Voivodeship, where Poland’s first nuclear power plant project is underway. The survey included companies in the following sectors: construction (30%), engineering and construction, (28%) and machinery (22%). Most of the companies surveyed have experience in large infrastructure projects, with nearly half (45%) having participated in the construction of gas or coal-fired power plants, and nearly a third (29%) having experience in the nuclear sector. The survey also showed that as many as three-quarters of Polish companies have experience in at least one project in the broadly defined energy industry.
As part of the quantitative survey, PIE identified four main groups of companies interested in participating in the Polish nuclear investment project – local observers (micro- and small enterprises with no nuclear experience), sleeping giants (medium and large companies with no nuclear experience), new professionals (micro- and small enterprises participating in the global nuclear supply chain) and market leaders (medium and large companies with significant foreign experience in nuclear projects).
‘Each of these groups presents different challenges. “Local observers” suffer from competency gaps, inadequate funding, and, most often, they feel uninformed. “Sleeping giants” fear involvement in a difficult project, hinting at the high demands. They need mobilization and evaluation. In turn, the “new professionals” point to the low awareness of Polish companies regarding the specifics of orders for the nuclear sector, which may affect the lack of sufficient resources and fulfillment of quality requirements, while the “market Leaders” indicate that the challenge to the high share of local content in the construction of the nuclear power plant in Pomerania may be competition from nuclear projects executed abroad, which will generate orders for Polish companies,’ explains Kamil Lipiński PhD, head of PIE’s climate and energy team.
‘Polish companies plan to participate primarily in supplementary and associated works related the nuclear investment project characterized by relatively low margins and technological requirements: construction of the conventional part of the power plant – with the exception of the turbine island (45%), and construction works related to the infrastructure around the power plant (43%). Difficulties in accessing funds for companies interested in working on the nuclear project were predominant among the barriers cited. Companies also pointed to the need to step up workshop activities related to the investment project. Unfortunately, it is often the companies least experienced in nuclear power that feel prepared, while industry veterans know that it’s a difficult project and there is a lot still to come,’ notes Adam Juszczak PhD, senior advisor in PIE’s climate and energy team.
According to the survey, domestic entrepreneurs estimate that the level of the local content in the Polish nuclear investment project could be around 40%, with entrepreneurs experienced in the nuclear industry showing less optimism in this regard. The majority of those surveyed who are interested in the first nuclear investment project express a desire to continue operating in the nuclear industry at home and abroad. At the same time, the surveyed companies are optimistic about further nuclear investment projects. 84% of them believe that the participation of Polish companies in such projects will grow.
The most frequently cited factors that attract domestic entrepreneurs to the Polish nuclear project included the opportunity to enter the nuclear power sector, to expand and scale up operations, to increase the competence of employees and to obtain valuable references, as well as the ambitious and demanding nature of the project.
The surveyed companies are also aware of possible difficulties in joining the project execution. They mainly point to lack of financial support (4.29 points on a five-point scale of indications), a skills gap (4.26), investment requirements that are too high (4.17), and the difficulty of obtaining suitably qualified employees (4.1).
‘As a development bank, we are very interested in supporting Polish companies so that the level of local content in the construction of the nuclear power plant is as high as possible. Through currently available financing avenues, we can already finance companies’ efforts to participate in the supply chain. We are also aware that preferential financing is expected, especially among companies for which contracts in the construction of the nuclear power plant may go beyond the scale of operations done so far. We are confident that with the cooperation of public institutions, the forms of financing will expand to get closer to market expectations. An important aspect from the survey, in our opinion, is the very high willingness to conduct own investments related to participation in the nuclear project, which suggests that companies are convinced that those investments are reasonable,’ says Marcin Terebelski, director of the Industrial Development program at Bank Gospodarstwa Krajowego.
The report indicated the challenges of increasing the participation of Polish companies, including, the inability to write provisions into contracts with contractors and suppliers that favor companies based on their country of origin. Such a practice is not permitted under both international and EU regulations.
The PIE report also showed that Polish companies need support in the process of obtaining certification and competence development in order to effectively participate in the investment projects. 36% of the surveyed companies do not yet have a single certification from those included in the survey, important from the perspective of being able to provide services and deliverables to the nuclear sector.
In the report, based on the quantitative and qualitative survey, PIE also made recommendations – including the founding of an entity to represent Polish entrepreneurs planning to participate in the supply chains of nuclear projects abroad, improving the visibility of Polish entrepreneurs’ support programs within the nuclear sector, enhancing the security and cybersecurity of enterprises, or bringing together the competencies of local, regional and national entities and other market education activities.
